Re: OPEC & Oil Prices

[Mason Clark <masonc@xxxxxxxxxxxxx>]

On a midnight dreary, looking at some ancient notes,
I came across this in the draft of a book I scribbled
shortly after the 1973 oil fiasco:

quote

Many Americans believe that the Arabs caused the higher
oil prices, starting with an  embargo.  In fact, the apparent
gasoline shortage and surge in prices was started by the oil
companies before the embargo.  The Arab oil producers,
along with Iran, Venuzuela, and others, saw the profits the
oil companies were making and decided they should demand
a fair share.  To remind ourselves of the facts, here is the
chronology as I read it in the headlines of the Wall Street
Journal:

Dec. 11, 1972 - U.S. acts to lift importation of oil
Jan. 1, 1973    - Fuel price boosts up to 8% coming
Mar. 26, 1973 - Oil import curbs removal
April. 2, 1973 - Oil companies raised prices paid to producers
April 30, 1973 - Fuel prices beginning increase
June 4, 1973   - Oil companies raise prices paid to OPEC
                        countries by 30c
July 2, 1973  - The Gasoline Shortage Eases
July 23, 1973 - Exxon Corp's earnings jumped 54 %
Sept. 17, 1973 - Retail gasoline prices will climb
                      - Oil-exporting countries call for price increases
Sept. 24, 1973 - Standard Oil (Ohio) raise dividends
Oct. 1, 1973 - Texaco to acquire coal reserves for $145 million
Oct. 22, 1973 - Arab oil procucers banned all petroleum exports
                        to the U.S.
                      - Oil indsutries profits surged
Nov. 5, 1973 - Fuel price boosts escalated as six major oil
                      companies followed five others' increases
Nov. 12, 1973 - Gasoline rationing within the next two or three
                         months and perhaps lasting for a year or two
                         was predicted

 The oil companies hit a profit gusher on or about January 1, 1973.
 The Arab oil embargo began on October 22, 1973.

 end quote

  I recall looking at the major oil company earnings in Value Line.
  Their earnings had exploded in the quarter before OPEC woke up.

 There was a lot going on.  Economists may wish to study how
 the oil company's profits rose when their raw-material cost rose.

         Mason Clark